The Research On The Influence Of Diversification Management Of XinHuZhongBao On Its Corporate Performance

Affected by a series of factors such as economic environment and marketplace,diversified management of listed companies in China as their own development strategy is the result of enterprise growth,and also an important way to achieve expansion.Diversification can help companies change from the scale of economic model into scope economy,while effectively improving the profitability and competitiveness of enterprises.Therefore,under the dual attraction of interest and efficiency,more and more companies choose to diversify.However,the real diversification of successful companies is rare.Because many companies only blindly seeking expansion,and ignoring their own competitiveness,enterprises scale,capital strength and other comprehensive factors,this undermines the value of the companies.Therefore,the performance of companies is often used to evaluate the effectiveness of diversification.Taking the XinHuZhongBao as an example,this paper adopts the method of case analysis,analyzes and evaluates the performance under the diversified business model.This paper first introduces the background and significance of the study,combing the research status at home and abroad and the theoretical basis.This paper briefly introduces the companies profile and the process of diversification of XinHuZhongBao,and analyzes the motivation of diversification.According to the data in the annual report of XinHuZhongBao,comparative analysis of the performance before and after diversification,specifically analyzes the impact of diversification from four aspects of profitability,growth capacity,solvency,operation ability,in order to the robustness,select the performance of professional competition.Through the comparative analysis of the comparison and the performance of competitors,it is found that the performance of enterprises is decreased after diversification,and the profitability is not mentioned obviously.In this paper,according to the problems of XinHuZhongBao’s diversification,puts forward some suggestions: strengthen the core competitiveness of companies,and form a sustained competitive advantage;Carefully enter the field of unrelated diversification,should accumulate relevant experience of the industry,and have corresponding strength,can improve the possibility of diversification success;According to the internal and external environment,appropriately adjusted diversification,the implementation strategy should objectively analyze its own situation and industry development,weigh the advantages and disadvantages,carefully implement diversification,rather than blindly enter high profit industry,but neglect the risk of its existence;Companies should implement diversification strategy appropriately,and guarantee the abundant cash flow to ensure the virtuous circle of sustainable development of enterprises.